Answer:
b. Budgeted unit sales - beginning merchandise inventory + desired merchandise ending inventory.
Explanation:
Since, the total purchases in units means the number of units that the company needs to buy after maintaining the necessary closing inventory to meet the budgeted sales. The total units required should therefore be equal to the total of the budgeted sales units and the units for the closing of inventory.
Also, if the opening inventory exists out of the total units required, then that number of merchandise does not need to be purchased as it already exists.
Therefore to reach the required purchase unit we need to add budgeted unit sales and desired merchandise ending inventory and deduct the beginning merchandise inventory.
So, the correct option is b.
Answer:
c. $4,000
Explanation:
The computation of the depreciation expense for year 2 under straight-line method is shown below:
= (Original cost - residual value) ÷ (useful life)
= ($25,000 - $5,000) ÷ (5 years)
= ($20,000) ÷ (5 years)
= $4,000
In this method, the depreciation is same for all the remaining useful life i.e $4,000 is charged for remaining three years
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